Medicare Recovery Audit Contractors RACs: An Overview

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MedicareRecovery Audit Contractors (RACs)An
Overview
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What is a RAC?RAC Program Mission

• The RACs will detect and correct past improper
  payments so that CMS and the Carriers/FIs/MACs
  can implement actions that will prevent future
  improper payments
• Providers can avoid submitting claims that dont
  comply with Medicare rules
• CMS can lower its error rate
• Taxpayers and future Medicare beneficiaries are
  protected

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RAC Legislation

• Tax Relief and Healthcare Act of 2006, Section
  302
• requires a permanent and nationwide RAC program
  by no later than 2010
• gave CMS the authority to pay RACs on a
  contingency fee basis

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MedicareRecovery Audit Contractors (RACs)An
Overview
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What is a RAC?RAC Program Mission

• The RACs will detect and correct past improper
  payments so that CMS and the Carriers/FIs/MACs
  can implement actions that will prevent future
  improper payments
• Providers can avoid submitting claims that dont
  comply with Medicare rules
• CMS can lower its error rate
• Taxpayers and future Medicare beneficiaries are
  protected

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RAC Legislation

• Tax Relief and Healthcare Act of 2006, Section
  302
• requires a permanent and nationwide RAC program
  by no later than 2010
• gave CMS the authority to pay RACs on a
  contingency fee basis

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RAC Jurisdictions
A
D
B
March 1, 2009
March 1, 2009
August 1, 2009
C
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RAC Review Process

• RACs review claims on a post payment basis
• RACs use the same Medicare policies as FIs,
  Carriers and MACs
• NCDs, LCDs CMS manuals
• Two types of review
• Automated (no medical record needed)
• Complex (medical record required)
• RACs will NOT be able to review claims paid prior
  to October 1, 2007
• RACs will be able to look back three years from
  the date the claim was paid
• RACs are required to employ a staff consisting of
  nurses, therapists, certified coders a
  physician CMD

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RAC Programs Three Keys to Success

• Minimize Provider Burden
• Ensure Accuracy
• Maximize Transparency

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Minimize Provider Burden

• Limit the RAC look-back period to three years
• Maximum look back date is October 7, 2007
• RACs will accept imaged medical records on CD/DVD
  (CMS requirements coming soon)
• Limit the number of medical record requests (CMS
  has established nationwide limits based on the
  previous year Medicare volume)

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Ensure Accuracy

• Each RAC employs
• A physician medical director
• Certified coders
• CMS New Issue Review Board provides greater
  oversight
• RAC Validation Contractor provides annual
  accuracy scores for each RAC
• If a RAC loses at any level of appeal, the RAC
  must return the contingency fee

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Maximize Transparency

• New issues are posted to the web
• Vulnerabilities are posted to the web
• RAC claim status web interface (2010)
• Detailed Review Results Letter following all
  Complex Reviews

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What Can Providers Do to Get Prepared?

• Know where previous improper payments have been
  found (OIG, CERT, Demo RAC Reports)
• Know if you are submitting claims with improper
  payments
• Prepare to respond to RAC medical record requests
• Keep/submit proper documentation
• Appeal when necessary
• Learn from your past experiences

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Contact InformationRAC_at_cms.hhs.govCMS Website
www.cms.hhs.gov/RAC
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Total Healthcare Claims Integrity, Quality and
Cost Containment
CMS RAC REGION D MAY 2009
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Agenda

• Overview of HDI
• Company History
• Healthcare Experience
• Management Team and Key Personnel
• Location
• Query Development
• Review Processes
• Provider Service

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HDI Mission

• HDI is the leading company
• in health care claims integrity
• Waste, fraud, abuse and improper payment
• identification and recoupment solutions
• for the government sector (Medicare/Medicaid),
• health plans, and major employers
• RAC Mission Ensure integrity of Medicare claims
  through the identification and correction of
  improper payments

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HDI Management Team

• Andrea Benko, President CEO
• HealthDataInsights co-founder and President,
  2000-present
• Davita, 1998-1999 (NYSEDVA)
• Total Physician Services, Inc., 1996-1998
• Vesicare, Inc., 1994-1996
• Total Pharmaceutical Care, Inc., 1990-1994 (NYSE
  AHG)
• Laboratory industry and clinical nursing, 1977
  1986, 1988-1990
• BSN, Wayne State University, 1977
• MBA, Harvard Business School, Harvard
  University, 1988

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RAC Key Personnel

• Lane Edenburn, EVP, General Counsel
• HealthDataInsights, 2005-present
• CMS, Branch Manager, Program Integrity, 2003 -
  2005
• Private practice, healthcare / technology,
  1991-1997, 2001-2003
• Physicians Resource Group, Inc., 1998 - 2001
• The EyePA, Inc.,1997-1998
• BS, Business Administration, Southwest State
  University, 1986
• Creighton University School of Law, 1991
• Judy Zwick, VP of Implementation Services
• HealthDataInsights, 1998 - present
• Anthem Blue Cross Blue Shield, 1989 -1998
• Audit and Recovery Operations Ohio
• Medicare Risk, Traditional
• University of Cincinnati, 1994 -1995
• Xavier University, 1996 -1997

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RAC Key Personnel

• Ellen Evans, M.D., Corporate Medical Director
• HealthDataInsights, 2007 - present
• Mutual of Omaha, Medicare Division, VP and
  Medical Director, 2005 - 2007
• VNA Outreach to Homeless Youth, Physician,
  volunteer, 2006 - 2008
• Blue Cross Blue Shield of Nebraska, Physician
  Reviewer, 2001 2005
• Geriatric Consultation Services, Nebraska,
  Director, 1993 2006
• MCMC Medical Care Ombudsman Program, Ind.
  Reviewer, 2000 - 2005
• Creighton University Medical Center, St. Joseph
  Hospital, Senior Staff, 1988 to 2008
• Board-certified Diplomate, ABFM
• Certificate of Added Qualification, Geriatric
  Medicine, ABFM/ABIM
• Diplomate, American Board of Quality Assurance
  and Utilization Review Physicians
• Fellow, American Academy of Family Physicians
• B. S. Biology, University of Houston, 1975
• M.D., University of Texas Medical School at
  Houston, 1983

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RAC Key Personnel

• Robin Luten, RN, BSN, CCM, CHCQM,
• VP of Quality Management / UR
• HealthDataInsights, 2006 - present
• Heart of Florida Regional Medical Center,
  Director of Case Management, 2005-2006
• Florida Hospital, Associate Director of Case
  Management, 1995-2005
• Oncology and Staff Nurse, 1980-1995
• Diplomate, American Board of Quality Assurance
  and Utilization Review Physicians
• BSN, University of Phoenix, 2001
• MBA, University of Phoenix, 2003

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Physician Advisory Boards

• CMS Physician Advisory Board
• Chairman Sam Green, MD, Cliff Molin, MD, MBA
• Oversee Total Quality Management Program
• Specialty focused Board to identify, review and
  validate queries and result sets
• Quality Advisory Board
• Chairman William Keane, MD
• Merck Co., Vice President, Clinical Development
  (rtd)
• Chairman, Dept of Medicine, Hennepin County
  Medical Center (rtd)
• MD, Yale University, School of Medicine

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Physician Advisory Boards

• Technology Advisory Board
• Chairman Amar Chahal, MD, MBA
• Co-founder of several high-tech companies
• Merck, informatics and outcomes division
• MBA from Columbia University MBBS (MD) from the
  Armed Forces Medical College, Pune, India Fellow
  of the Royal College of Surgeons (FRCS),
  Edinburgh, Scotland
• Payors / Members Advisory Board
• Chairman Donald Miller
• Board of Directors (rtd) Schering-Plough, The
  Bank of New York
• Executive Management, Dow-Jones Company
  Deputy Assistant Secretary of Defense
• PMD, Harvard Business School

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Quality Management Program

• Existing Medical Advisory Board
• Six physicians representing various specialties
• Review staff and review process similar to
  provider, QIO and Claim Processing Contractor
  review processes
• IRR (Inter-rater reliability) program

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Quality Management Program

• Review guidelines Federal statutes or
  regulations, CMS Regulations, NCDs, LCDs, and
  review guidelines, such as McKesson InterQual
  Milliman (guidelines only support clinical review
  judgment)
• CMS RAC Validation Contractor performs Quality
  Reviews and accuracy scores

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CMS RAC Program
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New Issue Ideas

• Where does HDI get its query ideas?
• Data Analysis
• SAS analysis, data mining, trending
• Policy/ Rules and Regulations
• LCDs NCDs
• IOM
• CRs
• Federal Regulations
• Reports (Outcomes)
• OIG Reports
• QIOs
• GAO Reports
• CMS Publications
• RAC Vulnerability Calls other known
  vulnerabilities
• Industry Practice Experience
• Provider Associations (underpayments)
• HDI Industry experience

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HDI Audits

• Automated Claims data analysis
• Complex Medical record review
• References applied to Date of Service

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HDI Review Personnel

• Same types of reviewers used by providers, QIOs,
  Claim Processing Contractors
• Certified coders
• Licensed RNs with specialties
• Inter-rater Reliability Reviews
• MD over-site and support

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RAC Process
RAC makes a claim determination
Automated
NO
Review
CMS New Issue Approval Process New Issues posted
to HDI provider website once CMS-approved (may
request records for new issue process not
posted to web site)
RAC decides whether medical records are required
to make determinations
RAC issues Review Results Letter to provider
(does NOT communicate improper amount or appeal
rights including no findings)
Provider has 45 days plus 10 calendar days mail
time to submit.
RAC has up to 60 days to review medical records
RAC makes a claim determination
RAC requests medical records
Complex
YES
Review
If no findings STOP
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Automated Review Discussion Period
Complex Review Discussion Period
RAC sends claim info to Carrier/FI/MAC
Carrier/FI/MAC adjusts issues Remittance Advice
(RA) to provider. Code N432
Day 1 RAC issues Demand Letter which includes
amount and appeal rights.
On Day 41, Carrier/FI/MAC recoups by offset.
Provider can pay by check by day 30 or request
early recoupment from MAC to avoid
interest. Provider can appeal by day 120. Appeal
by day 30 will hold recoupment although interest
is charged unless outcome is provider favor.
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Appeals

• Provider appeal rights remain as per CMS policy
• The AHA has estimated that it costs a provider an
  average of 2,000 to 7,000 to file a RAC appeal
  sources American Hospital Association and the
  Wellington Group
• Interest rates approximate 12 annual rate
• Unnecessary and non-meritorious appeals are
  expensive and time consuming for all parties

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Discussion Period

• After provider receives Review Results letter
  (complex) or Demand letter (automated)
• Incoming discussion period materials are received
  via fax or mail
• Additional materials submitted during discussion
  period are carefully reconsidered by independent
  reviewer who was not involved in original
  improper payment determination
• HDI decision is sent to provider in writing
• HDI coordinates activity with Claims Processing
  Contractor

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HDI Provider Service

• Experienced staff, each with average of 15 years
  of claims and CMS policy experience
• Internal training and policy education for each
  finding
• Weekly team meetings CMS instruction,
  contractor and provider communication, education
• Regular team notifications
• Clinically-supported issue response(s)
• HDI RECOUP system - dynamic audit trail of all
  activity

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HDI Contact Information

• Provider Service
• Part A/Hospice [phone]
• Part B/DME [phone]
• Fax
• Hospital Hospice [phone]
• Physician/DME [phone]
• Email racinfo_at_emailhdi.com
• RAC website www.racinfo.com or
  www.healthdatainsights.com

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Provider Contact Information

• HDI RAC web-site to be launched May 2009
• www.racinfo.com
• or
• www.healthdatainsights.com
• Hospital provider letter will include user name
  and password
• Provider logs on, changes password, and provides
  contact information for RAC letters
• Contact Informational Letter will be mailed to
  hospital Compliance Officer or CFO

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HDI Provider Website
Initially for hospitals other provider types to
be added this summer



Sign In
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HDI Provider Website


Provider and Name Default
Update Current Information
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Conclusion

• Questions?

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Medicare Recovery Audit Contractor (RAC)
Program

• American Health Care Association
• May-June 2009 RAC Webinars

Mark E. Reagan Partner mreagan_at_health-law.com
HOOPER, LUNDY BOOKMAN, INC. 575 Market Street,
Suite 2300San Francisco, CA 94105 Tel
415.875.8501Fax [phone]
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Recovery Audit Contractors

• Background-
• Demonstration Program Lessons Learned
• Permanent Program
• Implementation
• Timing Rules and procedures
• Areas of Potential Focus
• Managing the Appeal Process - Timelines
• Strategies to Limit Recoupment Timelines within
  Timelines

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Background RAC Legislation

• Medicare Modernization Act Section 306
• Mandates CMS to conduct RAC demonstration
• Contingency fee-based retrospective claim review
• Tax Relief Act and Healthcare of 2006, Section
  302
• Mandated a permanent and nationwide RAC program
  by no later than 2010

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Background RAC Program Mission

• to detect and correct past improper payments,
• to implement actions that will prevent future
  improper payments.
• Providers can avoid submitting claims that dont
  comply with Medicare rules
• CMS can lower its error rate
• Taxpayers future Medicare beneficiaries are
  protected

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Background Source of RACs Audits

• Where do RAC audits come from
• Data mining
• OIG Work Plan
• CERT Reports
• GAO Reports
• RAC Evaluation Report (as updated)

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The Demonstration Phase

• Medicare Prescription Drug, Improvement, and
  Modernization Act of 2003 (MMA) Section 306
• Mandated 3-year CMS demonstration using
  Recovery Audit Contractors (RACs) to detect and
  correct improper payments in the Medicare fee
  for service program.
• Demonstration program intended to determine
  if use of RACs was a cost-effective means of
  adding resources to ensure correct payments to
  providers and suppliers and to protect the
  Medicare Trust Fund.
• The demonstration operated in New York,
  Massachusetts, Florida, South Carolina and
  California and ended on March 27, 2008.

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RAC Collections by Error Type/Demonstration(Net
of Appeals)

• Most improper payments occur when providers
  submit claims that dont comply with Medicare
  coding rules or medical necessity guidelines

9 No/Insufficient Documentation 74.3M
17 Other 160.2M

32 Medically Unnecessary 391.3M
42 Incorrect Coding 331.8M
SOURCE Self-reported by RACs
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RAC Appeal Data/Demonstration (update Jan 2009)
source CMS report 2/08 source CMS report
6/08 source CMS report 1/09
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Permanent RAC Program
 

• Tax Relief and Health Care Act of 2006 Section
  302
• The RAC Program made permanent and requires
  the Secretary to expand the program to all 50
  states by no later than 2010.
• CMS plans to have 4 RACs in place.
• Each RAC will be responsible for identifying
  overpayment and underpayments in approximately ¼
  of the country.
• The new RAC jurisdictions match the DME MAC
  jurisdictions.
• First rollout in Summer of 2009 (from
  previous March 1, 2009 dates)

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Revised Phase-In
PRG subcontractor
PRG subcontractor
PRG subcontractor
Viant subcontractor
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Implementation Status

• http//www.cms.hhs.gov/RAC/
• Unselected RACs appealed selection whereupon an
  automatic stay stopped work for all four RAC
  regional awards until a determination is made by
  GAO, as required under provisions of the
  Competition and Contracting Act of 1984 (CICA).
• On February 6th, CMS effectively resolved the
  disputes by settlement where two unsuccessful
  RACs would subcontract with selected RACs.
• Viant. As a subcontractor to Connolly Consulting,
  the RAC for Region C, Viant will conduct complex
  reviews of hospital inpatient claims and
  physician-administered J-codes in North Carolina,
  South Carolina, Virginia and West Virginia.
• PRG-Schultz. PRG Schultz will act as a
  subcontractor to Diversified Collection Services
  (Region A), CGI (Region B) and HealthDataInsights
  (Region D). In this capacity, PRG Schultz will
  audit Part A/B MAC claims in, Maine, New
  Hampshire, Vermont, Minnesota, Wisconsin, Idaho,
  Oregon, and Washington home health claims in
  Regions A, B and D and durable medical equipment
  claims in Region B.

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Lessons Learned CMS Changes to RAC Program
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Lessons Learned CMS Changes to RAC Program
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RAC PROGRAMRecord Request Limitations

• Limits on the Number of Medical Records a RAC
  can Request per Month (Actually every 45 days)
• Based on 10 of average monthly claims (2008)
• Maximum of 200 claims every 45 days

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Permanent RAC Implementation

• Section 302 in TRHCA requires the Secretary to
  implement the RAC program throughout the country
  by no later than January 1, 2010
• RAC MAC coordination - CMS transmittal 145 Jan 9,
  2009
• CMS strategy to ensure that the RAC permanent
  program will not interfere with transition from
  FIs to new Medicare claims processing
  contractors, called Medicare Administrative
  Contractors (MACs).
• This strategy will allow the new MACs to focus on
  claims processing activities before working with
  the RACs.
• Generally, the RAC blackout period will be
• a. 3 months before a MAC begins processing claims
  for a given State
• b. 3 months after a MAC begins processing claims
  for a given State.
• CMS and the permanent RACs will undertake
  aggressive provider outreach.
• CMS to make available RAC-identified service
  specific vulnerability data via web posting, so
  providers can avoid making those errors in the
  future.
• Providers should regularly review on-line
• Providers should all review trends in their own
  past denials

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Top RAC Recovered SNF ClaimsCA only

• Physical therapy and occupational therapy
  (medically unnecessary)
• Speech-language pathology services (medically
  unnecessary)
• Other Part B claims (i.e., blood glucose)
• Part A claims will likely be in play
• Impact of consolidated billing

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Investigation/Analysis

• According to CMS, the RACs analyze claims data
  using their own proprietary software to identify
  clearly improper payments and likely improper
  payments
• Clearly improper Automated Review the RAC
  contacts the provider and requests a refund of
  any overpayment amounts
• Example Duplicate Payment
• Likely improper Complete Review the RAC
  requests medical records form the provider,
  reviews the claim and medical record and then
  makes a determination as to whether the claim
  contained an overpayment
• Example Medical Necessity

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Problematic Areas for Potential Denials of Claims

• Payments are made for services that do not meet
  Medicares medical necessity criteria
• Payments are made for services that are
  incorrectly coded
• Providers fail to submit documentation TIMELY, or
  fail to submit enough documentation to support
  the claim reviewed
• Duplicate payments

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RAC Application of Standards

• RACs apply statutes, regulations, CMS national
  coverage, payment and billing policies as well as
  National Coverage Determinations, Local Coverage
  Determinations that have been approved by
  Medicare
• RACs are not to develop or apply their own
  coverage, payment or billing policies

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RAC Program Prepare for RACs

• Establish internal RAC team
• Interdisciplinary Team Legal, Finance, Clinical,
  Compliance, IT
• Identify RAC point of contact for internal and
  external RAC communications
• Develop central tracking mechanisms/database
  for all RAC - Incoming and Outgoing
• Coordinate the tracking mechanism with
  communications structure record reviews, and
  appeal of recoupment deadlines
• Conduct self audits to identify potential
  problems
• Participate in RAC trainings and outreach
• Monitor news sources, CMS, associations, and
  your own reports to stay abreast of trends
• If desired, development of unique forms for
  Redeterminations and other appeal levels once
  issues identified

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Strategies

• Record Requests
• Denials
• Reviewing Denials for compliance
• Implementing the Appeal Process appeal rights
  and recoupment
• Additional Defenses and Issues to Raise or
  Consider

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RAC initiates Review

• Request for medical records
• Typically the process will begin with a notice of
  a possible overpayment and a request for medical
  records
• The RAC will request certain records to support
  the claim and provide a deadline for the provider
  to submit the records
• Typically, 45 calendar days from date of letter

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Responding to Record Requests

• Stamp date and Time Received
• 45 calendar days from date of letter
• Can request an extension
• Notify RAC if significant discrepancy between
  date of letter and date of receipt
• Identify any internal issues in expeditiously
  getting the mail for processing

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Responding to Record Requests

• Was the request sent to the right place?
• Notify RAC of the contact person with contact
  information
• Did the RAC exceed the Record Request Limit?
• Every 45 days (starting with the first request
  received)
• 10 of average monthly inpatient claims (max of
  200)
• 1 of average monthly outpatient claims (max of
  200)

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Responding to Record Requests

• Copying of Record and Others
• Ensure entire record is copied
• Include copies of NCD, LCD, coding guidelines,
  CMS guidance?
• Review of all records before they are released
• Permits early identification of issues
• Establishes priority for appeals
• Intensive work

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Responding to Record Requests

• Has the claim already been subject to audit by
  another contractor
• Did the RAC follow the New Issue Review Process?
• Initial requests may be part of the process
• Letter should clearly state basis for the request
• Look to the CMS and RAC websites and confirm that
  issue is identified
• Is this even a RAC Request?
• Confusion with so many different Medicare
  contractors (i.e., MACs, PSCs, MICs, etc.)

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Responding to Record Requests

• Document Management?
• Stamp number (Bates Stamp) on bottom of each page
  produced
• Scan everything produced to RAC
• Include cover letter itemizing contents of box of
  documents or CD
• Send certified mail or, if regular mail, complete
  affidavit of service by mail

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Responding to Record RequestsData Management

• Information about the production
• Patient information
• Status of case
• Reimbursement information
• RAC response
• Status at each level of appeal

• Audit ID Number
• Type of Audit
• Reason for Audit (Issue Specific)
• Date of Record Request
• Date Received
• Next Deadline

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RAC Claim DenialsDetermination Letter

• If the RAC concludes that there has been an
  overpayment, based on its review of the medical
  records, it will send a notice of determination
  which explains, among other things
• How the overpayment was determined
• Recoupment and Right to Rebuttal/Discussion
  Period
• Appeal rights
• The letter will also notify the provider of the
  date of recoupment
• Handled by the MAC
• Pressure points of appeal and recoupment
  timelines The time to stop recoupment is far
  shorter than time to appeal

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• Stamp the date received
• Appeal period begins when you receive the
  redetermination (demand letter), which is
  presumed to be five days after the date of the
  letter absent evidence to the contrary
• 120 days to appeal (i.e., request a
  determination)
• Appeal within 30 days to stop recoupment on day 41

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• Review the Denial
• Automated reviews
• Lack of documentation (records not submitted
  timely)
• Coding issues
• Medical necessity denials

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Recoupment Rebuttal/Discussion Period

• Vehicle to indicate why recoupment should not
  occur/discussion period
• May rebut any proposed recoupment action by
  submitting a statement within 15 days of the
  notice of an impending recoupment action
• Designed to detect errors in calculation/not
  substantive analysis
• Discussion period allows for discussion of
  medical necessity denial with RAC up through
  recoupment
• Occurs prior to and separate from the appeal
  process

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RAC Appeals

• Provider has right to appeal adverse
  determination as with any Medicare contractor
• Request for redetermination
• Request for reconsideration to QIC
• Request for administrative law judge hearing
• Request for review by Medicare Appeals Council
• Federal court review

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Appeal Rights/Process

• Notice of Initial Determination
• Notice must contain
• Basis for full or partial denial
• Info on right to a redetermination
• All applicable claim adjustment reasons and
  remark codes
• Source of the RA and who may be contacted for
  more information

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Appeal Rights/Process

• Appeal Process Step 1 Request for
  Redetermination
• Providers Request for Redetermination due 120
  days from receipt of the notice of initial
  determination from RAC)
• Medicare Redetermination Request Form (CMS
  20027) or your own form submitted to the MAC
  (not the RAC)
• Notice of initial determination is presumed to be
  received five days from the date of the notice
  unless evidence to the contrary
• MAC has 60 days for written redetermination
• Redetermination Notice must contain explanation
  how CMS policies, coverage rules, etc. apply

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Recoupment Limitation During Appeal

• Demand letter required for all overpayments
  subject to recoupment limitations
• New requirements for demand letters for
  overpayments subject to recoupment limitations
  (Medicare Financial Management Manual (MFMM)
  200.2)

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Recoupment Limitation After Demand Letter First
Level

• Recoupment stopped if valid and timely request
  for redetermination received within 30 days from
  date of demand letter.
• If valid and timely request for redetermination
  received more than 30 days from date of demand
  letter, recoupment will be stopped from that
  point, but any previously recouped funds may not
  be refunded.
• Strategic Question Ability to submit complete
  redetermination request to stop recoupment

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Recoupment Limitation After Demand Letter
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Appeal Rights/Process

• Appeal Process Step 2 Request for
  Reconsideration to QIC
• Reconsideration Request Form (CMS Form 20033)
  or your own form due to FI within 180 days from
  receipt of the redetermination
• No minimum amount in controversy requirement
• All evidence must be submitted at this level
  unless good cause shown
• QIC has 60 days for written Reconsideration

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Recoupment Limitation - Second Level Appeal

• Upon receipt of Medicare redetermination notice
  or revised overpayment notice/demand letter,
  recoupment will be stopped if valid and timely
  appeal received within 60 days of notice for
  second level appeal by a Qualified Independent
  Contractor (QIC)
• If decision unfavorable to provider or partially
  favorable, recoupment can begin on 61st day after
  Medicare redetermination notice or revised
  overpayment notice/demand letter
• Contractors have until 76th day to start
  recoupment. After recoupment begins, recoupment
  can be stopped by a valid and timely appeal.

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Recoupment After Second Appeal (QIC)

• Recoupment will occur regardless of any further
  appeals
• Recoupment can occur at day 30 after the date of
  the QIC decision or from the revised written
  final determination due to effectuation

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Appeal Rights/Process

• Appeal Process Step 3 Request for
  Administrative Law Judge Hearing
• Request for ALJ hearing due 60 days from date of
  receipt of the QICs reconsideration notice
• Use Form CMS 20034 A.B or your own form
• Case file forwarded by QIC to the Office of
  Medicare Hearing Appeals
• Hearing is de novo
• ALJ decision due within 90 days
• Minimum Amount in Controversy is 120
• Hearing by video conference, telephone conference
  or in person
• Maximum chance of success

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Appeal Rights/Process

• Appeal Process Step 4 Request for Review with
  Medicare Appeals Council
• Any party to the hearing can request review
  (DAB-101)
• MAC can review ALJ decision on its own motion
• Request for MAC review due 60 days from the date
  of receipt of the ALJ hearing decision or
  dismissal
• MACs review is de novo
• No minimum amount in controversy
• Record review but may request oral argument
• Appeals Council will remand to ALJ if additional
  facts are necessary

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Appeal Rights/Process

• Appeal Process Step 5 Federal Court Review
• Request for judicial review due 60 days from the
  date of receipt of the MAC decision or
  declination for review by the MAC
• Minimum amount in controversy is 1,220

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• Strategic Issues
• 30 days to stop recoupment
• 120 days to request redetermination
• 11.375 interest accrues from date of
  determination
• Cash flow can extend repayment for 210 days
  from the date of determination

85

• One strategy appeal all claims within 30 days
  at first level and within 60 days at second level
• Advantages
• Cash flow (for a maximum of 210 days from date of
  determination)
• Potential Sentinel Effect?
• Disadvantages
• Accrue interest at 11.375
• Frantic timetable to assemble appeals

86

• A Second Strategy appeal some claims within
  recoupment limits
• Based on amount in question?
• Based on review of the merits?
• A Third Strategy appeal claims within appeal
  but not recoupment limits

87
Additional Defenses and Issues

• Without Fault (Section 1870)
• Even if overpayment identified provider may still
  be paid if without fault (i.e., no fraud or
  pattern)
• 3 year rule (unique counting rule)
• Waiver of Liability (Section 1879)
• Even if service determined to be not reasonable
  and necessary, payment could be made if provider
  or supplier did not know, and could not
  reasonably have been expected to know that
  payment would not be made

88
Additional Defenses and Issues
 

• Timing of Reopening Good Cause 42 C.F.R.
  405.980
• Medicare Appeals Council Decisions involving
  hospitals and skilled nursing facilities
• Decisions by Appeals Council and the ALJ lack
  jurisdiction to decide contested reopenings under
  the Medicare appeals process

89
Additional Defenses and Issues
 

• Timing of Reopening/Good Cause
• MAC Decision Palomar Medical Center v. Johnson,
  S.D. Cal. No. 309-cv-00605-BEN-NLS (S.D. Cal.
  Complaint filed 3/24/09)
• Challenges RAC reopening of two year old hospital
  claim
• ALJ determined RAC had not shown good cause for
  reopening
• MAC reversed ALJ finding ALJ lacked jurisdiction
  to determine whether reopening was lawful
• Court challenge to jurisdictional argument and
  due process
• CMS Transmittal 1671 (February 16, 2009) RAC
  data analysis is good cause and ALJ has no
  jurisdiction

90
Additional Defenses and Issues
 

• Credentials of reviewer
• Can request a copy of credentials
• Medical Director
• Coding Experts

91
Additional Defenses and Issues
 

• Review criteria used
• Must be Medicare policy, National Coverage
  Determinations, Local Coverage Determinations
• What was in effect at time
• Is Medicare policy applied correctly
• Can any of the coverage determinations be used as
  a defense?
• Incorrect application of statutes
• Medical records standards
• Physician testimony/declaration
• Standard of care evidence
• Peer-reviewed science

92
Additional Defenses and Issues

• Sampling
• Extrapolation PIM (CMS Pub100-08) Chapter 3
• 3.10.1-3.10.11.2
• Challenge statistical analysis